Interim Results 2020

Summary

De Volksbank shows robust progress on its shared value ambition during the Covid-19 pandemic; growing appreciation for our mission of ‘banking with a human touch’.

Developments in shared value scores:

Customers: customer-weighted Net Promoter Score to record high at +5 (year-end 2019: 0)
Society: 48% climate-neutral balance sheet (year-end 2019: 44%); Financial Confidence Barometer slightly higher at 51% (year-end 2019: 48%)
Employees: ‘Genuine attention’ KPI of 7.9 (year-end 2019: 7.7)
Shareholder: return on equity of 6.2% (2019: 7.7%), on the basis of a strong capital position

Growth in current account customers, mortgage portfolio and savings deposits

Net growth in the number of current account customers by 38,000 to 1.6 million; market share of new current accounts of approximately 20%
Increase in new mortgage production to € 3.0 billion (first half of 2019: € 2.8 billion); market share of new mortgage loans lower at 5.6% (2019: 6.1%)
Increase in retail savings by € 2.1 billion to € 40.5 billion; market share retail savings stable at 10.4%

Drop in net profit to € 106 million, driven by higher impairment charges related to the Covid-19 crisis

Net profit of € 106 million, 31% lower compared with the first half of 2019 (€ 154 million)
Slight increase in total income to € 480 million (first half of 2019: € 471 million), due to higher commissions and treasury results; decline in interest margin to 1.35% (first half of 2019: 1.40%)
Increase in operating expenses excluding regulatory levies to € 268 million (first half of 2019: € 255 million), attributable to higher consultancy costs and a € 7 million positive revaluation in the first half of 2019
Impairment charges of financial assets of € 45 million (first half of 2019: a reversal of € 13 million), as a result of more pessimistic economic scenarios for the future due to the Covid-19 crisis

Capital position as strong as ever

Common Equity Tier 1 capital ratio up to 33.8% (year-end 2019: 32.6%; leverage ratio of 5.0% (year-end 2019: 5.1%)
Successful issuance of € 500 million in green Tier 2 bonds on 15 July 2020

“

Faced with the Covid-19 crisis in the first half of 2020, de Volksbank made every effort to help its customers where possible and to guarantee continuity of its services. And we found that our customers appreciated our efforts. Our employees showed tremendous commitment.

The impact of the Covid-19 crisis on income and operating expenses in the first half was limited. As a precaution, however, we have made a considerable provision for our mortgage portfolio in particular, taking into account more pessimistic economic scenarios for the future. Given our social role, we have wholeheartedly and successfully pursued our efforts to create value for our customers, society, employees and our shareholder during this period. This gives us confidence for the future.

Maurice Oostendorp, Chairman of the Board of de Volksbank

„